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Exam 18: Introduction to Managerial Accounting

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Question 31

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For an automotive repair shop, the wages of mechanics would be classified as direct labor cost.

A) True
B) False

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Question 32

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Period costs are operating costs that are expensed in the period in which the goods are sold.

A) True
B) False

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Question 33

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The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Match the items below for a bakery to the type of cost (a-d) . Answers may be used more than once. -Depreciation expense-factory

Match each description to the appropriate term (a-d) . Answers may be used more than once. -Rent on office facilities

All of the following are product costs except

Planning is the process of monitoring operating results and comparing actual results with the expected results.

Managerial information is for external as well as internal stakeholders.

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given. -Electricity costs to run the factory

Which of the following is not true in regard to direct materials for a bakery?

The following are some of the costs incurred by a cake factory. Identify them as either: -Advertising fees

The vice presidents of production and sales and the controller hold line positions in most large organizations.

Conversion costs are the combination of direct labor, direct material, and factory overhead costs.

An example of an eco-efficiency measure would be cost savings generated by recycling.

Prime costs consist of direct materials, indirect materials, and direct labor.

Given the following data:?? $\begin{array} { l r } \text { Work in process, beginning } & \$ 14,000 \\\text { Work in process, ending } & 20,000 \\\text { Direct labor costs } & 4,000 \\\text { Cost of goods manufactured } & 8,000 \\\text { Factory overhead } & 8,000\end{array}$ Direct materials used is

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during the current year. Indirect labor amounted to $2,700, while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100, maintenance of $4,500, supplies of $1,800, depreciation of $7,900, and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. Prepare a statement of cost of goods manufactured.

The payment of dividends is an example of a cost.

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as

Labor costs that are directly traceable to the product are part of factory overhead.